Report: SC orders LTO to refund Php 29.8 million in RFID fees

AUTO NEWS

Supreme Court declares RFID MOA null and void

by Anton Andres

February 22, 2017 18:48

Earlier today, the Supreme Court has declared the Radio Frequency Identification Project Memorandum of Agreement (RFID MOA) as null and void. This is due to the direct bidding between the government and Stradcom Corporation which first started in 2009.

The steps to make the RFID MOA null and void was promulgated in January 31, 2017 and was penned by Chief Justice Maria Lourdes P. A. Sereno. On top of that, the Supreme Court has also ordered the LTO to refund RFID fees collected during the RFID Project’s implementation. The LTO began collecting fees for the RFID program up until January 12, 2010 when the Supreme Court issues a Status Quo Ante Order.

By the time the Supreme Court issued the Status Quo Ante Order, the LTO had collected Php 29,894,200 in RFID Fees. In their 30 page report (GR No. 190431), it stated, “The RFID fees collected during the implementation of the RFID Project prior to the issuance of this Court’s Status Quo Ante Order are likewise ordered refunded to the payors thereof”.

The Supreme Court said that Stradcom was in violation of the Build-Operate-Transfer Law (BOT Law). Stradcom and the Government did not undergo public bidding and did not issue a notice inviting all prospective project proponents for bidding. In addition, the Court also stated that the RFID MOA also violated the Build-Own-Operate Agreement (BOO Agreement), saying that the additional Php 350 charge was not part of the original contract and under the formula set by the Agreement.

The official ruling is as follows:

“The RFID MOA must, thus, be struck down by this Court for failure to comply with the rules on public bidding. There is no guarantee that the RFID fee that will be charged to the public is a fair and reasonable price, as it has not undergone public bidding. Likewise, there is no guarantee that the public will be receiving maximum benefits and quality services, especially from the additional hardware, such as the RFID tags and readers. These are to be procured by Stradcom from its two suppliers, which have not been identified and are not even parties to the RFID MOA.

On the other hand, Stradcom, which has been awarded the exclusive right to develop and operate the RFID system without having undergone competitive public bidding, stands to earn considerable amounts of revenue from the contract. In fact, in just three months, the period when the RFID Project was implemented prior to the issuance of the Status Quo Ante Order by this Court, the LTO had already generated P29,894,200 in RFID Fees. Clearly, the evils sought to be avoided by the requirement of competitive public bidding are evident in this case”.